Canadian Armed Forces members at the Adazi Military base in Latvia in August. Ottawa has launched a government agency for major defence procurements valued at $100-million or more.Christinne Muschi/The Canadian Press
Major defence procurements in Canada will now go through a single agency as part of the federal government’s plan to reform a process that industry has long lamented as a bane to Canada’s defence industrial base.
Prime Minister Mark Carney announced the official launch of the Defence Investment Agency on Thursday in Ottawa. The agency will be overseen by Secretary of State for Defence Procurement Stephen Fuhr, and newly appointed chief executive officer Doug Guzman. Previously, Mr. Guzman served as the deputy chair of the Royal Bank of Canada, as well as managing director at Goldman Sachs.
The lengthy timelines and layers of red tape throughout Canada’s defence-procurement system have plagued it for decades, putting the country and its armed forces at a disadvantage in modern warfare.
“Our defence procurement under many governments before this one has been too slow to meet our needs. And that now has become even more problematic, because technology is speeding up so fast,” Mr. Fuhr said in an interview with The Globe.
Defence and security make up first pillar of Canada’s foreign policy, Anand tells UN
The goal of this new agency is to equip the Canadian Armed Forces at the “speed of relevancy,” he said.
To maintain efficiency and not be waylaid by smaller contracts, Mr. Fuhr said the agency will only oversee procurements valued at $100-million or more. Smaller contracts will continue to go through standard processes.
Stephen Fuhr, Secretary of State for Defence Procurement, in Helsinki, Finland, in August. Mr. Fuhr will oversee the Defence Investment Agency with chief executive Doug Guzman.Markku Ulander/The Associated Press
The team behind the agency will include staff consolidated from other departments that previously shared responsibility for defence procurement, such as National Defence, Public Services and Procurement, and the Coast Guard.
“You have a massive duplication of effort that’s resolved with one single point of accountability,” Mr. Fuhr said.
Procurement requirements will continue to come through from the armed forces, Mr. Fuhr said. But contracting authority will now lie with the investment agency, which is housed within Public Services and Procurement Canada.
During the first phase of the agency’s rollout, which will take about 8-12 months, some ongoing procurements will be shifted under its purview. For example, Canada’s procurement of up to 12 new submarines will now be managed by the Defence Investment Agency.
At the end of about 12 months, the agency will enter into its second and final phase, meaning it will have reached its final form and be ready to take on even more procurement responsibility.
Defence procurement in Canada is often particularly difficult to navigate for small-to-medium-sized enterprises (SMEs) that don’t have the resources or capital to withstand the lengthy process.
Former fighter pilot Stephen Fuhr in charge of overhauling defence contracting in new cabinet
Opinion: Canada must move from defence procurement to defence production
Mr. Fuhr said he has been very clear with large contractors and original equipment manufacturers that he expects them to support smaller Canadian businesses as part of their work with the federal government.
However, for now, there’s no specific mechanism in place within the agency to support SMEs.
Domestic capabilities such as shipbuilding, aerospace, advanced manufacturing and infrastructure with both military and civilian applications, were highlighted by the federal government in Thursday’s announcement as investment priorities through the new agency.
The government also touted its new dedicated defence procurement body as a way for Canada to align itself more closely with allies, such as the United Kingdom, Australia and France, who have similar agencies, as well as the European Commission’s ReArm Europe Plan/Readiness 2030.
When Mr. Carney initially announced his intention to create Canada’s newest procurement body in June, he titled it the Defence Procurement Agency.
The name has since changed, in part owing to the federal government’s recognition of the need to transform its massive boost in defence spending into investment in its own backyard, Mr. Fuhr said.
“The Prime Minister is sensitive to, and so am I, and so is everyone that I work with, giving the CAF what it needs. But where we can, we need to parlay that into stimulating ourselves economically, and we’re going to do that.”